Bausch Health Companies Inc (BHC)

[JLS]

Market Breakdown,

That fork was a pretty good representation of the market for two months. But the last two green days had long shadows that traded below the fork. I don't know if that alone was a sign of weakness or not, but it kept me out of the market. I personally took the whole decline of the last eight days as a sign of weakness, and that's why I stayed out of the market after selling my BHC shares (way too early, and pissed me off) hours after it announced earnings. Since I have a strong tendency to go all-in on every trade, I will not enter any Long trades until I see a consolidation of $SPX, which means that at least a little testing of support is required -- it's better to be a little late than way too early. In other words I want to see some back-&-forth testing of a support level, then I'll reevaluate.

For starters, I think a test of SMA(200) is likely, and $SPX crossed that level a couple months ago so that's no big deal. Granted, looking at the SR Density chart, $SPX is at the top of a very strong support level with a lot of history, but this bull market is also long in the tooth. In fact, this move down is only to the first Fib level off the top. The index is already trading below SMA(50), and has little to no shadow, so it wouldn't be a big leap to trade down to the next lowest Fib level of 38% where there is another spike in support, and that would put the index below all SMAs.

Then there's the dashed blue line which emphasizes a 50% retrace of the last major bull run higher. Price correction rule Number 1: always buy the 50% retrace. That's the only reason I have the dashed blue line there. It doesn't mean I think $SPX is going that far down, but I wouldn't be surprised if it did.

At this point I'm going to be a watcher, not a player. It wasn't very long ago that $SPX was trading below all moving averages -- way below; late December.